Ohians See Drop in Income Since ’70s: Inflation, Job Exodus Erode Average Wage

Cincinnati Enquirer - September 1, 2002

Cincinnati Enquirer

By Ken Alltucker

Here’s a sobering Labor Day revelation: Two decades ago, Ohioans worked less and were paid more for their efforts.

That’s the conclusion of a new report from an Ohio think tank that analyzed two decades of income data culled from U.S. Census Bureau surveys.

The study, to be released today by Policy Matters Ohio, illustrates a declining standard of living for most Ohioans.

Also, black income gains trailed whites, but females made great strides even if they still lag behind their male coworkers.

The typical Ohio worker earned $12.81 an hour in 2001, down from $13.73 (adjusted for inflation) in 1979.

Most of that drop came during the 1980s when Ohio’s manufacturing job base began to shrivel. Since 1989, median hourly wages have risen 41 cents.

Even though Ohio families tend to earn more than the typical U.S. family, the overall trend for most working Ohioans is nothing to celebrate, said Amy Hanauer, executive director of Ohio Policy Matters and one of the report’s authors.

It used to be a high-school-educated man in Ohio could get a manufacturing job and get a decent wage, Ms. Hanauer said. Now, there are fewer (good-paying) jobs for unskilled or low-skilled workers.

The study doesn’t include a breakdown of wages by different sectors or education levels. Nor does it contain data for cities, counties or even neighborhoods. A more detailed look at household income by race and many other details for Cincinnati and other cities will be released Wednesday by the Census Bureau

Nevertheless, it confirms a trend that many labor researchers agree harms Ohio workers and families.

George Zeller, senior researcher of Council for Economic Opportunities in Greater Cleveland, said Ohio’s wage decline is likely the result of steep job losses in the state’s manufacturing sector.

We are losing manufacturing jobs, Mr. Zeller said. That is a very serious problem. You have these workers who were making a pretty good living then become downwardly mobile.

The report concludes that the gap between rich and poor has widened. The economic good times of the 1980s and 1990s proved truly beneficial for the top 21 percent of wage earners; pay dropped for everybody else.

Of course, not all workers shared the pain equally.

Wage gains of black men and women trailed whites.

Earnings for Ohio’s white and black men both declined since 1979, but the average white man’s $15 hourly wage is $3 more an hour than the average black man’s. What’s more, while white men’s hourly earnings have rebounded slightly (2 cents an hour) since 1989, wages of black men dropped 40 cents.

People tend to think that’s not true, but it’s what I say on a daily basis, said Jim Clingman, a consultant who teaches classes on black entrepreneurship. It tells me from a black perspective that we have a whole lot of work to do.

The picture is brighter for working women. Wages increased 10.3 percent since 1979 to $11.17 an hour. White women fared better than black women.

Despite the overall wage decline, Ohio households are earning more than a decade ago. That’s largely because dual-income families are working longer hours in order to afford expenses such as housing, child care and health insurance.

The typical married couple with children worked 72 hours a week from 1998 to 2000, up from 61 weekly hours from 1979 to 1981.

Increasingly, families are deciding extra work hours are needed to maintain a standard of living that used to be possible with one wage earner, the report concludes.

The need for families to work longer hours is exacerbated by the rising costs of housing and health care.

Many Ohio companies have pared or eliminated benefits such as health insurance and pensions to save costs.

The percentage of working poor remains steady. In 1979, 23.9 percent of workers earned wages below the poverty level vs. 23.5 percent in 2001. More and more men are taking poverty-level jobs (defined as a job that pays $8.71 an hour or less), up more than 50 percent during the past two decades.

The study’s findings point to the need of new laws for Ohio workers such as minimum wage increases and a refundable earnings income tax credit, Ms. Hanauer said.

Wages just haven’t caught up from the 1979 level, she said. I think the jobs have gotten worse. “Increasingly, families are deciding extra work hours are needed to maintain a standard of living that used to be possible with one wage earner.’